Debtor Attempts Suicide as a Result of Bank of America’s Illegal Actions in Bankruptcy Case

Bank of America has been slapped with $45 million in punitive damages for their mishandling of a mortgage in California. The bank was cited specifically for the harassment experienced by the plaintiffs in the case and the emotional distress caused by those actions. The lawsuit arose because of Bank of America’s failure to comply with the automatic stay provisions of the U.S. bankruptcy code. For individuals or families facing unlawful actions by creditors, retaining the services of a New York bankruptcy lawyer can provide added protection against this type of harassment.

In early 2009, Erik and Renee Sundquist were struggling to keep up with payments on their Lincoln, California, home. As a result, they reached out to their mortgage holder, Bank of America, seeking a modification for their loan. Representatives of the bank informed the Sundquists that, because they were still current on their mortgage loan, they would not be eligible for consideration for loan modification. Despite maintaining a credit score of over 800, the Sundquists opted to default on their loan in March 2009 in an attempt to qualify for loan modification from Bank of America. Representatives of the bank, however, repeatedly lost the paperwork associated with the Sundquists’ requests for modification or denied their requests outright. In total, the Sundquists completed about 20 loan modification requests that were denied or lost by Bank of America. The couple was repeatedly given the run-around by Bank of America officials with requests for information the Sundquists had already supplied or updated information. On June 14, 2010, the Sundquists filed for Chapter 13 bankruptcy because of the actions taken by Bank of America regarding their home loan. The bankruptcy caused serious issues for the family and created financial and emotional distress.

U.S. bankruptcy law provides for an automatic stay of action by all creditors after bankruptcy proceedings have been filed. Specifically, creditors are prohibited from enforcing liens, attempting to acquire collateral or other property from the debtor or filing cases in court to recover amounts owed. In the case of the Sundquists, however, Bank of America ignored the automatic stay regulations more than six times in just two months by filing eviction proceedings, serving the couple with a three-day Notice to Quit and foreclosing on the property just one day after the Chapter 13 filing was made. The bank later reversed its decision and the sale but failed to inform the Sundquists of that fact. During the intervening months before the Sundquists moved back into their home, their home had been burglarized and most of the appliances and items of value on the property had been stolen. To add insult to injury, the homeowners association for their neighborhood assessed them a $20,000 fine for failure to maintain landscaping on their property. Bank of America also attempted to collect back mortgage payments from the couple during the period when the Sundquists were not living in the house and were not aware that their mortgage had been reinstated.

Renee Sundquist recorded the actions of Bank of America in a detailed journal that she kept throughout these proceedings. The repeated denials and loss of paperwork created emotional distress for the couple, who had only defaulted on the loan in an effort to obtain a loan modification from Bank of America. On numerous occasions, bank agents showed up unannounced at the home and banged on the doors, frightening the couple’s children and creating added stress for the family. As a result of harassment by the banking institution, the lawsuit indicated that Erik Sundquist attempted suicide and that Renee Sundquist was diagnosed with post-traumatic stress disorder. Renee Sundquist also experienced heart attack symptoms and was hospitalized as a direct result of the stress caused by the actions of Bank of America during this period of time.

For residents of New York City and New York State who are considering their financial options, consulting with a NYC bankruptcy attorney can prevent creditors from acting outside the law with impunity. Your New York bankruptcy lawyer can enforce the automatic stay provisions of the legal code to stop harassment in its tracks and to protect you and your family from situations like the one the Sundquists faced. By making sure you have a qualified NYC bankruptcy attorney on your side, you can resolve your financial situation quickly and effectively to ensure the brightest possible future for yourself and your family.

One element of President Donald Trump’s proposed tax reform plan may have a significant effect on residents of New York State. The plan would end the current ability of taxpayers to deduct the amounts paid for state and local taxes on their federal returns. Since residents of New York currently pay one of the highest state tax rates in the country, the loss of these deductions could represent a significant added financial burden for taxpayers across all brackets.

In the state of New York, deductions for state and local income taxes can add up to nearly 10 percent of the adjusted gross income of taxpayers. By eliminating these deductions, residents of the state will be asked to shoulder an even higher tax burden. The change is expected to hit wealthy New York residents hardest. Those with incomes over $100,000 per year receive nearly 90 percent of the financial benefits associated with state and local tax deductions on federal tax returns.

Figures compiled by the Tax Foundation indicate that eliminating state and local tax deductions on federal returns nationwide would increase the amount collected by the Internal Revenue Service (IRS) by $1.8 trillion in the next 10 years. This would provide added resources for funding other tax cuts proposed by the Trump administration, some of which may lessen the blow of losing the deductions for state and local tax obligations.

The removal of deductions for state and local taxes is part of President Trump’s proposed overhaul of the entire federal tax system, which would include reductions in the marginal tax rates paid by most individuals and businesses and the reduction of individual tax brackets from the current seven to just three. The taxation rate of the top bracket would fall from 39 percent to 25 percent under the proposal. On the corporate side, the tax rate would fall to 15 percent; businesses, however, would lose many of the tax breaks they enjoy under the current system.

President Trump’s proposal is still very much a work in progress. It is not certain if any of these provisions will actually make their way through the review process to become part of IRS regulations. If the elimination of state and local tax deductions is implemented, however, residents of New York can expect to pay more in federal taxes for the foreseeable future.

Consulting with a knowledgeable NY tax lawyer can provide added help in reducing your overall tax indebtedness. These legal professionals can deliver advice and guidance in navigating IRS regulations and managing your finances effectively. By enlisting the help of an experienced NY tax lawyer, you can ensure that you keep as much of your hard-earned money as possible while minimizing stress when tax time rolls around once more.